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BILL ANALYSIS

BILL NUMBER:	House Bill 4201 (AS INTRODUCED)
TOPIC:	Requires the Department of Natural Resources to grant road access easements upon request
SPONSOR:	Representative Lindberg
CO-SPONSORS:	Representatives Roberts, McDowell, Sheltrown, Brown, Polidori, Lahti, and Ball
COMMITTEE:	Tourism, Outdoor Recreation and Natural Resources
Analysis Done:	March 2, 2009

POSITION

The Department of Natural Resources (DNR) opposes this legislation as introduced.

PROBLEM/BACKGROUND

The DNR receives a significant number of requests, both formal and informal, for private road easements across state-owned land to access private land. Private road easements on state-owned lands have a negative impact on the existing state land in several ways, including increased private development inside and adjacent to DNR management areas such as state parks and state forests; an increase in trespass violations as a result of development; fragmentation of ownerships within management area boundaries; impediment to DNR efforts to consolidate its ownership; and numerous new roads dissecting lands used for habitat, hunting, snowmobiling, hiking, etc. Because of these known negative impacts, the DNR only approves a small percentage of private-road easement requests.

In Michigan, there are thousands of privately-owned parcels of land that may not have legal access. Some of these parcels are within state-owned lands. The private land owner has the same right to use a forest road or DNR road as any other member of the public. However, use of the road does not constitute legal right of access that may be required when financing is sought for mortgages on the private land.

Michigan law currently provides a remedy to lack of access, providing for an “implied easement” over lands from which the landlocked parcel was created (or “split out”). Thus, owners of landlocked property frequently have legally authorized alternatives to requesting a road easement over state land.

Based on statutory restrictions limiting the granting of private access easements, as well as resource management considerations enumerated below, the Natural Resources Commission (NRC) direction and DNR procedures specify that requests for easements over DNR-administered land be reviewed for impacts on natural resources and public benefit. These procedures direct that granting such easements is to be in limited situations, done only where true need is demonstrated, the applicant demonstrates there are no alternatives, and the impacts of the private easement to the public’s investment in state resources can be minimized.

For the same reasons, easements are recommended for approval only when all criteria are satisfied. In addition, current practice is that the applicant must agree to restrictions on the use of the private property to be served, along with other resource protection measures; such as limiting use of property to one single family residence, no subdivision of the parcel, or set-backs from water courses.

DESCRIPTION OF BILL

Section 2123 (1). Current statute stipulates DNR “may grant easements over state land provided specific conditions are met. The bill amends “may” to “shall grant…” “but only if…” the specific conditions are met.

Public land should not be transferred for exclusive private use without it being determined that it is absolutely necessary and there is limited impact on the natural resources.

Section 2124 (c). Changes “unnecessary” damage to “unreasonable” damage. This has the effect of weakening the protection of natural resources in the current statute.

It appears the intent of the bill is to make it easier for private property owners to get a private-road easement over state-owned lands from the DNR.

SUMMARY OF ARGUMENTS

Pro

None

Con

1. Granting easements has the effect of encumbering title to land over which they run and also affects the adjoining public property. This reduces the market value of state assets. Reducing value or encumbering land that was purchased with federal funds or state restricted funds may represent a diversion of those funds and may be illegal, or may require approval of the federal agency.

2. Granting easements over trail corridors diminishes the use of the trail by the public and can create safety hazards by those using the crossing or the trail, particularly in instances where easements cross trails where snowmobiles travel at high speed.

3. The resulting increased development on private in-holdings will reduce the amount of public land available to the public for hunting due to the statutory requirement for a 450 ft. safety zone around occupied dwellings, and have a negative impact on wildlife habitat.

4. Creating private road easements across state-owned land restricts the DNR’s ability to alter roads or close areas to vehicle traffic in the future, as proper scientific-based management, weather or road conditions, fire danger, or other conditions may require.

5. Changing the word “may” to “shall” creates a greater expectation that easements will be granted, diminishing the public resources even if a viable alternative exists.

6. The proposed amendment to Section 2124 changes “unnecessary damage” to “unreasonable damage,” resulting in less protection of state-owned land and associated natural resources. Changing the wording from “unnecessary” to “unreasonable” is problematic since unreasonable is a more subjective term. What the easement holder considers reasonable may be deemed unreasonable by the owner of the land burdened by the easement. This will tend to increase disputes over requests for easements and increase the amount of time spent by public employees on matters related to benefiting private land, not public land.

FISCAL/ECONOMIC IMPACT

Are there revenue or budgetary implications in the bill to the --

(a) Department

Budgetary:

The amount of requests for private road easements over state-owned land received and processed by the Department would likely increase if these amendments are approved and the level of justification for denial will be increased. This will result in additional workload for DNR staff.

Revenue:

The DNR may receive additional revenue as a result of issuing more easements; however, this additional revenue will not likely be enough to cover the additional costs of processing more requests, nor will it address the potential loss of revenue as a result of a parcel's market value being lowered by the encumbrance that would occur.

Comments:

None

(b) State

Budgetary:

None

Revenue:

None

Comments:

None

(c) Local Government

Comments:

None

OTHER STATE DEPARTMENTS

The Office of Attorney General (AG) is also reviewing this bill. In 2008, the DNR’s Office of Land and Facilities was contacted by the AG for indication of the Department's position on HB 4981 of 2007, predecessor legislation to HB 4201. The AG indicated the bill does not appear desirable.

ANY OTHER PERTINENT INFORMATION

Section 2123 (1) (h) in the bill does not address or correct how the Department would be able to grant an easement when the individual does not have a similar road easement to offer across the individual's. In many cases, there is not state land to be reached by crossing the individual's land, which means the individual has no easement to offer and therefore a requirement of the Act cannot be met.

This could be addressed by amending Section 2123 (1) (h) to read as follows (changes in bold caps): The individual offers a similar road easement to the department across the land to which the easement GRANTED BY THE DEPARTMENT is to provide access UNLESS THERE DOES NOT EXIST ANY STATE LAND TO BE ACCESSED ACROSS THE INDIVIDUAL'S LAND. THE DEPARTMENT SHALL NOT ACCEPT A ROADWAY EASEMENT UNDER THIS SUBDIVISION IF THE ROADWAY EASEMENT WOULD END AT A BODY OF WATER.

It is suggested that "roadway" be changed to "road" throughout the legislation. The reason is that "roadway" has a broader connotation than "road" with regard to the type of use being granted on state land.

The legislation should stipulate that the Grantee will pay fair market value for a granted road easement by adding to the conditions in Section 2123 the following:

i. The applicant will pay for all costs incurred in granting the easement, including the cost of DNR review, surveys, public notice and, for easements over lands encumbered by federal oversight, the expense incurred in obtaining federal approval.

The State of Michigan experiences the same problem addressed by this bill in not having legal access to thousands of acres of state-owned land. Companion legislation could address this by requiring private owners to provide easements to the state in situations where the state does not have legal access. This would provide numerous benefits to the public and enhance the value of lands held in public trust.

Private land is frequently sold by cash sale or under “land contract,” where the buyer “buys on time” and makes payments to the seller. In such cases, no third party financing is involved (such as by a lending institution), which would require a title search to disclose if the parcel has legal access. If the buyer does not have an attorney, they may not be aware that the parcel does not have legal access. Even when property sales are facilitated by licensed real estate agents, the buyer may not understand the property does not have legal access. The seller (and agent) may indicate that the property has access by the road that runs to it. This is true; there is a road to it, but that does not constitute legal right of access. The road may run across private or state-owned land and may be used by the public but there is no granted easement with it. Brokers should be required by law to disclose whether property has legal access. In many states brokers are required to divulge this information.

ADMINISTRATIVE RULES IMPACT

Rules can be promulgated to provide for administration of the act.

_______________________________

Rebecca A. Humphries

Director

_______________________________

Date

OLAF/WLD/FMFM/PRD